BUSINESS TECHNOLOGY CENTER REDEVELOPMENT PLAN SUMMARY

Transcription

1 BUSINESS TECHNOLOGY CENTER REDEVELOPMENT PLAN SUMMARY F rom autumn 2014 through spring 2015, HBDi worked closely with its consultant team to create a redevelopment vision for the Palm Center Business Technology Center. Through extensive research on existing conditions, discussion with HBDi Board members, and engagement with the Southeast Houston community, the team has produced a plan which capitalizes on the positive changes happening in the immediate vicinity, improves its services to the neighborhood, creates an urban node of economic opportunity for the wider region, and helps further HBDi s mission.

2 TRANSFORM INTO A VIBRANT, MULTI-USE HUB FOR SOUTHEAST HOUSTON Over the long term, Palm Center - BTC will become: A much denser, multi-use destination that radiates vitality and integrates into the surrounding neighborhood An array of onsite businesses and services that answer the needs of the immediate neighborhood, such as new places for dining A center of excellence for the population overall in Southeast Houston, where an ambitious middle class can find ways to link itself into the key engines of the Houston economy Palm Center Business Technology Center Redevelopment Plan Summary TRANSFORM INTO A VIBRANT, MULTI-USE HUB FOR SOUTHEAST HOUSTON Over the long term, Palm Center - BTC will become: A much denser, multi-use destination that radiates vitality and integrates into the surrounding neighborhood An array of onsite businesses and services that answer the needs of the immediate neighborhood, such as new places for dining A center of excellence for the population overall in Southeast Houston, where an ambitious middle class can find ways to link itself into the key engines of the Houston economy THE PALM CENTER - BTC REDEVELOPMENT IS THE RESULT OF AN EVOLVING SOUTHEAST HOUSTON The Palm Center - BTC Redevelopment is the Result of an Evolving Southeast Houston Densification & Inner Loop Development Activity Desire to Reverse Lagging Social & Economic Indicators Across SE Houston Energy and Health Care + Supply Chain Growth METRORail Expansion - Purple Line Southeastern Terminal Market Demand: Neighborhood Retail, Local Employment, Flex-Office, Multifamily Palm Center BTC Redevelopment Widening Mid-Level Workforce Skills Gap Expanding Startup + Entrepreneurship + Global Trade Ecosystem 2 The site will offer space to accommodate programs that foster small businesses, develop and train a valuable workforce, enhance youth entrepreneurship and global trade capabilities, provide health care services, as well as nurture a live-work-play environment accessible by transit. PALM CENTER - BUSINESS TECHNOLOGY CENTER - REDEVELOPMENT PLAN

3 The site will offer space to accommodate programs that foster small businesses, develop and train a valuable workforce, enhance youth entrepreneurship and global trade capabilities, provide healthcare services, as well as nurture a live-workplay environment accessible by transit. CAPITALIZE UPON CURRENT OPPORTUNITIES Thorough research of existing conditions and other recent studies revealed: MARKET SUPPORT enter Business Technology Center Redevelopment Plan The consultant team s Market Study showed that limited increments of office space and retail / commercial space would be supportable in the early redevelopment period, but improving demographics and the momentum of transformation both within and in proximity to the Palm Center - BTC would support higher rents and larger quantities of space in the future. alm Center Business Technology Center Redevelopment Plan Summary Office Locally generated Southeast Houston businesses will be seeking reasonable quality newer office space at idential competitive Quality lease multifamily rates rental units affordable to middle class workers will be in demand; townhomes Commercial/retail in the upper Initially relatively $200s small will increments fit in well; of space light will rail attract access independent a strong businesses plus; provided can that go lease on Palm ter Residential BTC costs site are or kept Quality nearby reasonable; multifamily redevelopment moderately rental priced café units sites or sit-down affordable such as restaurant north to middle would side be of class an Griggs appropriate workers Road anchor will be in demand; new townhomes Residential Quality in the multifamily upper rental $200s units will affordable fit in well; to middle light class rail workers access will be a in strong demand; plus; new townhomes can go on Palm Center in the BTC upper site $200s or nearby will fit in well; redevelopment light rail access a sites strong such plus; can as go north on Palm side Center of Griggs - BTC site Road or nearby al and Infrastructure Evaluation redevelopment sites such as north side of Griggs Road uation hysical of and the Infrastructure existing buildings Evaluation by ional n evaluation architects PHYSICAL of AND the revealed INFRASTRUCTURE existing the buildings strength EVALUATION by of the rofessional perty assets An evaluation architects at Palm of the existing revealed Center buildings the BTC. strength by professional the eal property assets at Palm Center BTC. architects revealed the strength of the real property er than the need for roof replacement or assets at Palm Center - BTC. rovement, Other than the the existing need for buildings roof replacement are well-olt and improvement, in good shape the for existing reuse buildings are Other than the need for roof replacement or well- improvement, the existing buildings are well-built lding built D and can in good be shape reused shape for reuse for as reuse office space, eting space, Building or D event can be reused space as office space, meeting meeting space, space, or event or space al site covers 20 acres, event including space buildings Total site covers 20 acres, including buildings and Building D can be reused as office space, parking Total site covers 20 acres, including buildings lot and parking lot unity ommunity Engagement COMMUNITY Engagement ENGAGEMENT he hile Palm the Center Palm Center BTC now BTC now serves serves a large a large While the Palm Center - BTC now serves a large portion ortion of Southeast of of Southeast Houston Houston and and will continue and will will continue to continue do so as to its to role evolves, it also provides an important focal point s o its so role as its evolves, role evolves, it also it also provides provides an an mportant focal point focal point for the for immediate the eighborhood. The consultant The consultant team team reviewed input ecent from input the from surrounding the community, for the immediate neighborhood. The consultant team reviewed recent input from the surrounding community, which has grown more organized in the last few years. HBDi also hosted a community meeting to present initial as hich grown has plan grown concepts more more and organized solicit organized feedback. in the in the last last few few ears. HBDi There also were hosted 135 people a community in attendance meeting at the to HBDi also hosted a community meeting to resent initial community plan concepts meeting March and solicit 30, 2015feedback. t initial plan concepts and solicit There were 135 people in attendance at the The plan responds to community desires by calling re were for 135 new retail/dining people in uses, attendance a meeting and event at the community meeting on March 30, space, and new public space and landscaping munity The plan meeting responds on March to community 30, desires by plan calling responds for new to retail/dining community uses, desires a meeting by ing and for event new space, retail/dining and new uses, public a meeting space and event landscaping. space, and new public space and Summary SUMMARY 3

4 BUILD FLEXIBILITY INTO THE CONCEPT A major benefit of the Redevelopment Plan concept is that it allows for a variety of different land use configuration scenarios on the Palm Center - BTC site. The parceling plan enables HBDi to take advantage of different partnering opportunities as they arise over the course of Plan implementation, thereby accommodating potential interest from private developers, economic development services organizations, small commercial businesses, and healthcare institutions. PARCEL 1 PARCEL 5 PARCEL 2 PARCEL 3 PARCEL 4 0 PHASE THE PLAN ACCORDING TO MARKET OPPORTUNITIES PALM CENTER - EXISTING BUILDINGS 1 =100 Market conditions will not support the assumption of massive new development at the very outset of redevelopment. However, the Plan is intended for an incremental implementation, with early phases to dramatically change Palm Center BTC s appearance and add value to existing and future structures. FACADE RENOVATIONS TO EXISTING BUILDINGS 1. The First Step: Beautification and Facade Improvement Upgrade existing building facades Renovate Building D and possibly other building interiors Add public plaza at light rail station Improve landscaping and walkways Market opportunities: Local small-business office demand, per market study Approximate cost: Plaza and landscaping $750,000 plus design cost, building renovations $3.5 million (façade redo and Building D interior only) to $11.0 million (all of existing space). 4 PALM CENTER - BUSINESS TECHNOLOGY CENTER - REDEVELOPMENT PLAN PHASE 1 BUILDING RENOVATION, PLAZA, AND LANDSCAPING / STREETSCAPE

5 Implementation strategy: Leverage internal assets and cash flow for private funding. Improvements will allow for future rent increases. Supplement funding for public plaza and sidewalks with TIRZ request. Seek further assistance from City of Houston Housing and Community Development Department (example: CDBG). Seek out conference / event facility operators about partnering on such a facility within Building D through a lease / operator agreement. 2. Initial Development: Small-Tenant Office / Commercial PHASE 2 NEW OFFICE / RETAIL Add 40,000 square feet of small-tenant office space with surface parking Include up to 20,000 square feet of ground floor commercial / retail Fronting on and activating public plaza Market opportunities: Demand for quality, reasonably priced, new office space for small businesses, plus neighborhood-oriented commercial and dining, per market study. Approximate cost: $9.5 - $10.0 million Implementation strategy: RFP distributed through public and organizational channels to commercial office and mixed-use developers for ground lease development agreement, subject to design standards and target lease rate levels. Facilitate usage of Community Reinvestment Act, EB-5 international investors, and New Market Tax Credits to assist financing as appropriate. Offer incentives through City of Houston Chapter 380 agreements or directly from HBDi (reduced lease costs for example). Include designated restaurant / café space within commercial portion with kitchen and associated utilities already built out. SMALL-TENANT OFFICE / COMMERCIAL BROAD VIEW INCLUDING METRORAIL STATION AND NEW PLAZA INCREMENTAL LONG TERM POTENTIAL BUILDOUT PHASING Square Feet of Space 600K 500K 400K 300K 200K 100K Office Retail K Phase 0 Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Phase 6 Plan Phase SUMMARY 5

6 CONCEPT PLAN - LONG TERM VISION ULTIMATE VISION SMALL-TENANT OFFICE COMMERCIAL / OFFICE PARKING SMALL-TENANT OFFICE 3. Long Term Future Phases: Incremental Commercial, Office, and Medical Space Time frame of 5 to 20 years Cultivate anchor tenant partnerships with synergistic economic development and health service organizations; Ground lease parcel by parcel to developers each parcel for new development, with structured parking: 1. Physical sit allows up to 271,000 sq.ft. additional office / medical space total over long term; larger increments if anchor tenant partnerships created; 2. Up to 110,000 sq.ft. ground floor commercial / retail space, reduce as needed per market constraints. Market opportunities: Local small business and organization demand, growing in volume and willingness to pay as Palm Center BTC and surrounding area become more attractive and vibrant; growing demand for workplaces and retail near light rail station over time. Approximate cost: Up to $75.0 million Implementation strategy: Outreach through employment of a dedicated real estate broker and direct invitations to cultivated partners; offering of incentives from HBDi directly (reduced lease costs for example), or through arrangements with City of Houston for Chapter 380 agreements; promotion of New Markets Tax Credits, Community Reinvestment Act and EB-5 as incentives to attract private capital investment; tapping into large nonprofits, public agencies, traditional and nontraditional venture capital to provide other capital investment related to economic development or health care anchor tenants 6 PALM CENTER - BUSINESS TECHNOLOGY CENTER - REDEVELOPMENT PLAN

7 PROACTIVELY SEEK PARTNERS FOR IMPLEMENTATION HBDi does not have unlimited resources of its own to tap for implementation of the Redevelopment Plan. However, HBDi and the consultant team have identified a range of partners who could help fund and manage the physical and programmatic elements added to the Palm Center - BTC over time. Key strategic redevelopment components: Conference and event facility Commercial/retail/office space Small business development programs Healthcare services and training programs Workforce development and skills training Small business trade programs Youth entrepreneurship programs Public space, infrastructure, and facilities HBDI REDEVELOPMENT PLAN PARTNERSHIPS HBDi has a number of avenues through which it can accomplish plan implementation: Ground leases can provide individual development sites to developers and generate a revenue stream for HBDi. Larger economic development or healthcare services organizations may have their own capital to contribute toward new development. Public funds or subsidies may be available to HBDi to reduce the costs of development. SUMMARY PERSPECTIVE The future Palm Center BTC will create a commercial activity node that is but one of the components of a revitalized and transformed neighborhood. Seamlessly integrated with the development projects already underway today, the expanding transit system, and the anticipated residential redevelopment on nearby sites such as the north side of Griggs Road, this portion of Southeast Houston will be a point of pride for the surrounding community and indeed the City of Houston as a whole. Once again the Palm Center area will be the core of vitality and source of economic empowerment, facilitating the evolution and renewal of Southeast Houston and its residents. SUMMARY 7

8 CONCEPTUAL VISION VIEW BETWEEN NEW COMMERCIAL AND BUILDING D VIEW DOWN LANDSCAPED CORRIDOR VIEW FROM RIGGS AT BEEKMAN VIEW FROM PLAZA TOWARD BUILDING D MAIN ENTRY VIEW PLAZA VIEW FACING NEW COMMERCIAL VIEW BETWEEN EXISTING BUILDINGS VIEW ALONG GRIGGS 8 PALM CENTER - BUSINESS TECHNOLOGY CENTER - REDEVELOPMENT PLAN